This invention relates to novel compositions which provide a new method for forming liposomes and can be used as drug delivery vehicles. More specifically, this invention relates to the use of hydrating agents, compounds with at least two ionizable groups, in conjunction with liposome-forming materials containing a long chain aliphatic or aromatic-based acid or amine to make a gel which spontaneously forms liposomes when diluted with an aqueous medium. This gel is also useful as a drug delivery vehicle.